AAPL stock slides, but is it a reaction to AI announcements?

There’s been an unusually large drop in the price of AAPL stock so far this week, losing roughly $25 per share in the two days since the WWDC keynote.

While some are inevitably speculating that investors weren’t impressed by Apple’s AI announcements, there are other factors at play …

Yahoo Finance was one of those to attribute the slide to the WWDC announcements.

Apple Inc shares were down 4% on Tuesday afternoon after the company’s annual developer conference left some investors questioning the pace of its artificial intelligence rollout, even as analysts broadly viewed the event as a step forward […]

Despite the reported improvements, analysts flagged meaningful limitations. Siri AI will launch in beta later this year for supported devices set to English and will not be available initially in the European Union on iOS or iPadOS. The feature is also excluded from China due to regulatory hurdles. That leaves two markets which, together, account for roughly 35% of trailing 12-month iPhone shipments, according to Morgan Stanley.

Other commenters, however, pointed to broader macroeconomic factors affecting a range of stocks, not just AAPL.

US stock futures declined on Wednesday after the US launched “self-defense strikes” against Iran in response to the downing of an American helicopter, escalating tensions in the region. Investors also awaited the release of US inflation data for fresh signals on the Federal Reserve’s policy outlook, after stronger-than-expected jobs figures last week reinforced expectations of an interest rate hike before the end of the year.

There are also suggestions that investors are selling some existing holdings in order to participate in the SpaceX IPO.

The idea that the slide has nothing to do with AAPL specifically seems to be supported by a look at a range of US stock indices over the past five days, which show a sea of red indicating a broader sell-off. We’re also not seeing much in the way of adjustments to analyst target prices for Apple.

Indeed, Morgan Stanley effectively notes that while the hardware limitations on some of the new features are bad news for many iPhone owners, this is likely good news for Apple as it may drive upgrades.

Morgan Stanley estimates 850 million iPhones cannot run Apple Intelligence at all, while 1.3 billion lack support for the most advanced version of Siri. The bank said those limitations point to hardware upgrade cycles and greater iCloud adoption as near-term monetization levers and raised its price target to $360 from a prior estimate, maintaining an Overweight rating.

For AAPL investors, then, the executive summary seems to be that what Apple announced was pretty much what the market expected, and the news is neutral to potentially good.

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